A Hong Kong-based company is currently embroiled in significant legal challenges regarding its contract to operate crucial ports at the Panama Canal. The Panama Comptroller General has initiated lawsuits aiming to declare this contract unconstitutional, alleging that it harms Panama’s interests.
The contract, originally signed in 1997 and renewed in 2021, allows the Hong Kong subsidiary of CK Hutchison Holdings to operate the Balboa and Cristobal ports. The company denies accusations of unpaid dues approaching nearly $1.2 billion. In spite of the disputes, CK Hutchison highlights its positive impact on Panama’s economy, citing the creation of over 25,000 jobs and the development of world-class port facilities.
CK Hutchison’s attempt to sell port assets across various countries, including Panama, to a consortium involving BlackRock has attracted attention amidst intensifying US-China tensions. While the United States initially welcomed the proposed sale, it triggered a review by Chinese regulators over potential anti-monopoly issues. The company subsequently contemplated adding a Chinese investor to the consortium.
Panama has asserted its full sovereignty over the canal, rejecting any suggestions that its ports fall under Chinese control.
During ongoing legal discussions, CK Hutchison underscores the importance of respecting the rule of law to assure investors of Panama’s business security. The Panama Ports Company has also expressed readiness to collaborate with the Panamanian government to foster a better future.
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